August 12, 2010 by Jeffrey Wittenberg, Esq.
This morning, like virtually every morning for the last year, I woke up to a news report that the federal government has shut down a Ponzi scheme. Like many before it, this Ponzi scheme was a so-called “affinity” scam, meaning that the investment promoter was of the same race, religion, nationality, etc., of the victims of the fraud.
As always, the government regulators reacted to the fraud, in contrast to preventing it. Don’t get me wrong, I am not bashing the government regulators at all. They are doing the best they can and often deserve substantial praise for their tremendous efforts. I am simply stating the fact that the government will not, and cannot, prevent you from becoming a victim of an investment scam. Only you can do that – either by yourself, or with the help of an investment professional, but not just any investment professional. Only an independent, conflict-free, experienced professional will suffice. That means someone who is not interested in managing your money.
Before you allow your ego to tell you that it could never happen to you, consider a study conducted by the NASD Investor Education Foundation, in cooperation with WISE Senior Services and AARP Foundation, which was released in 2006. This study contains a few surprising facts about victims of investment fraud. The findings below are enough to make anyone think twice about making an investment without a second opinion from an independent, conflict-free, investment professional.
- Investment fraud victims are more financially literate than non-victims.
- Investment fraud criminals use a wide array of different influence tactics—from friendship to fear and intimidation tactics—to defraud the victim.
- Fraud pitches are tailored to match the psychological needs of the victim.
- Investment fraud victims are more likely to listen to sales pitches.
- Investment fraud victims are more likely to rely on their own experience and knowledge when making investment decisions.
- Fraud victims experience more difficulties from negative life events than non-victims.
- Investment fraud victims are more optimistic about the future.
- Investment fraud and lottery victims dramatically under-report fraud.
In addition to the government regulators, many government agencies and non-profit organizations are in the trenches every day fighting to protect investors from losing their life savings by providing free investor education services. Investor education is simply not enough. In order to prevent becoming a victim of investment fraud, you must seek out an objective, sophisticated opinion to evaluate the investment opportunity.
The problem is that, until now, there was no affordable service available to the average investor. Fortunately, Wittenberg Law created the Investment Scam Prevention ProgramTM to fill the void. The Investment Scam Prevention ProgramTM is affordable to anyone considering an investment of $10,000 or more, and will identify red flags that give rise for concern with any investment opportunity.
My mission, and my deep passion, is to protect the savings and futures of innocent investors. That is exactly why I have used my resources to develop an affordable program for all investors. Investment scam prevention must not be just accessible to the super wealthy. It must be available to everyone.